A British court on Monday declared fugitive economic offender Vijay Mallya bankrupt. With this order, Indian banks will now be able to easily attach Mallya’s assets around the world. A consortium of Indian banks led by the State Bank of India (SBI) filed a petition against Mallya in the British Court.
Insolvency and Companies Court (ICC) Judge Michael Briggs did a virtual hearing in the Chancery Division of the High Court. In hisjudgment, he said, “I declare Dr. Mallya Bankrupt.”Now, Mallya has no chance of appealing against the decision of the London High Court.
Liquor Baron will remain on bail
Law firm TLT LLP and barrister Marcia Shekerdamian appeared on behalf of the Indian banks during the hearing. Mallya, 65, will meanwhile remain on bail in the UK until legal proceedings related to his extradition are completed.
Court turned down Mallya’s demands
During the hearing, Mallya’s lawyer Philip Marshall sought a stay of the order till the legal challenges continue in the Indian courts. However, the court turned down the demand of his lawyer. The judge categorically said that there is no evidence that Mallya will return the entire money to the banks in due course.Mallya’s lawyers also submitted an application to the court seeking permission to appeal against the bankruptcy order, which was turned down by Judge Briggs.
Progress in Mallya’s case so far
- Vijay Mallya has been declared a fugitive economic offender in January 2019 for non-payment of loans and allegedly defrauding banks.
- Mallya left India on 2 March 2016.
- On 21 February 2017, the Home Secretary applied for Mallya’s extradition to the UK.
- Vijay Mallya has been arrested in London on April 18, 2017. However, Mallya also got bail on the same day.
- Mallya’s Indian passport was revoked on 24 April 2017.
- On 2 May 2017, he resigned from the membership of Rajya Sabha.
- Case management and extradition hearings began on 13 June 2017 at Westminster Magistrates’ Court.
- On 10 December 2018, Westminster Court Chief Magistrate Emma Arbuth not granted the extradition and sent the file to the Home Secretary.
- In February 2019, the Home Secretary of the UK ordered the extradition of Mallya to India.
- On 5 April 2019, Judge David of the High Court of England and Wales refused to allow the papers to appeal.
- 13 banks led by SBI had filed a petition against Mallya in a London court. These include Bank of Baroda, Corporation Bank, Federal Bank Ltd., IDBI Bank, Indian Overseas Bank, Jammu and Kashmir Bank, Punjab and Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Asset Reconstruction.
Significance of this judgement
The move is set to pave the way for a consortium of Indian banks led by the State Bank of India (SBI) to proceed with worldwide freezing order to obtain repayment of debt owed by the now-defunct Kingfisher Airlines.
Bankruptcy order in the UK implies, there is an automatic vesting of all of the bankrupt’s assets in a Trustee in Bankruptcy, whose function is to investigate and establish true value of assets and liabilities, in order to sell relevant assets and paying back to creditors. Under UK law, a bankrupt person must cooperate with the Trustee in Bankruptcy.